Bitwise Tells the SEC, “The World Is Ready For Bitcoin ETF,” Praising Market Efficiency
Matt Hougan, global head of research at Bitwise said:
“A lot of people have a view of the crypto market that is anchored somewhere in the past … maybe in Silk Road, maybe in the 2018 bear market. The reality is that the market has become truly institutional in nature, with very tight arbitrage between real exchanges, major advances in custody, and the growth of a large, regulated futures market.”
Page seven of the Bitwise presentation shared with the SEC shows that the average deviation of bitcoin price on cryptocurrency exchanges has decreased since December 2017. As hackers have proved adept at stealing bitcoin from exchanges, other companies and individuals, Bitwise presents the fact that cryptocurrencies are increasingly custodied by large institutions as a sign of maturity.
They identify three key factors:
- The Bitcoin spot market has become efficient.
- Bitcoin custody has become fully institutional.
- The regulated futures market has become significant.
The reality is that the bitcoin market of today bears little resemblance to the crypto market of a few years ago. The crypto market today is one dominated by firms like Jane Street and Fidelity; it's one where regulated, institutional custodians provide world-class service and are insured by Lloyd's of London.
On the other hand Grayscale’s Bitcoin Investment Trust (GBTC) has been trading over the counter since 2013, the SEC denied Tyler and Cameron Winklevoss’ application for a bitcoin ETF in July 2018, and a month later, in a mass announcement, rejected nine other bitcoin ETFs.